BRUSSELS (Reuters) - The European Commission said the EU should proceed with an overhaul of taxes on digital firms even if the rest of the rich world did not follow suit, a draft report said.

The document is part of an EU push to tap more revenues from online multinationals such as Amazon and Facebook, who are accused of paying too little tax in Europe by routing most of their profits to low-rate countries such as Ireland or Luxembourg.

The draft report, to be adopted on Thursday, said that on average brick-and-mortar multinationals pay in taxes in the EU more than twice what their digital competitors do.

Traditional large firms face a median 23.2 percent tax rate, while digital giants do not pay more than 10.1 percent - and when they sell directly to customers, rather than to firms, their effective rate goes down to 8.9 percent, data cited by the Commission showed.

An earlier report by a European lawmaker said EU states may have lost in tax revenues up to 5.4 billion euros ($6.5 billion) just from Facebook and Google, now part of Alphabet, between 2013 and 2015.

"A level playing field is a pre-condition for all businesses to be able to innovate, develop and grow," the Commission said, adding that fairer taxation of the digital economy was urgently needed.

Partly because of the uneven taxation, revenues in the EU retail sector grew on average by only 1 percent a year between 2008 and 2016, while in the same period revenues of the top-five online retailers, such as Amazon, grew on average by 32 percent per year, the Commission's report says.

NEXT STEPS

The document, seen by Reuters, will be presented at a summit of EU leaders on September 29 dedicated to digital issues. Despite divergences and scepticism among some smaller states, the 28 EU countries are expected to find common ground on digital taxation by December.

The Commission is seeking a compromise among rich countries worldwide in a bid to reduce opposition from EU states that fear losing competitiveness if the EU moves ahead on its own in this field.

But "in the absence of adequate global progress, EU solutions should be advanced within the single market", the document said, adding that a legislative proposal may be presented in the spring regardless of global developments.

The best way to tackle distortions would be to review the notion of "permanent establishment" so that firms could be taxed also in countries where they do not have a physical presence, the Commission said.

At the moment online companies can often avoid paying taxes in countries where they generate large revenues because they do not have a physical presence there.

A proposal to change the corporate tax base is already under discussion in the EU. The Commission believes it represents "a basis to address these key challenges", but needs the unanimous support of EU states to turn the plan into law.

To move ahead more quickly, the Commission said short-term solutions could be considered. They include an "equalization" tax on turnover, as proposed by France and backed by 10 EU countries, the report said.

Alternative short-term options would be a withholding tax on payments to digital businesses and a levy on revenues from advertisements or other services provided by digital firms.

But short-term options "have pros and cons, and further work is needed", the Commission said, warning that they may go against double-taxation treaties, state aid rules, fundamental freedoms and EU international commitments under free trade agreements and the World Trade Organization (WTO).

There could be a billion reasons.ILLUSTRATION: FÉLIX DECOMBATByMichael Smith,Jonathan Levin, andMark Bergen

September 26, 2017, 5:00 AM CDT

In May, scores of people on the front lines of America’s opioid crisis packed the National Association of Addiction Treatment Providers conference in Austin to listen to a Google contractor named Josh Weum. Google LLC doesn’t have anything to do with treating addicts, and the company didn’t send Weum there to talk about helping people get clean. He was explaining how to use Google to cash in on America’s $35 billion addiction treatment market.

Specifically, Weum was part of a panel discussion on ethics. But his job was to promote Google’s giant digital marketing business, and for 14 minutes he threw around such terms as desktop immersion, conquesting, multiscreen dynamic, and PPC (pay per click). At the heart of Weum’s pitch was the product that has made Google’s parent, Alphabet Inc., the second-most valuable company in the world: the AdWords keyword auction system. Through this system, addiction treatment providers (like any other advertisers) bid for search words. If they win, their ads sit atop the free search results; any time someone clicks on an ad, Google gets paid. Weum’s message was simple: AdWords is the most efficient way to the addicts who can afford treatment. “Google is here to help you, as far as growth,” Weum, who gave his title as AdWords ambassador, told the crowd of owners and operators of addiction treatment facilities.

Federal law, including the Affordable Care Act, requires insurers to cover substance abuse treatment—and a single patient can generate hundreds of thousands of dollars in insurance claims for such care. That has produced an online battle for well-insured addicts, and Google sells the weapon of choice. Respected and effective treatment centers work the system, and so do crooks. Last December, a grand jury in Palm Beach County, Fla., investigated fraud and abuse in the addiction industry and found that gaming Google searches is a common tool for criminals to lure addicts into questionable and sometimes dangerous treatment. Six months later, the state of Florida—a national addiction treatment mecca with about 1,500 licensed facilities—enacted law HB 807 to crack down on internet marketing abuses by addiction treatment service providers and to regulate call centers. “The ones at the top of the list aren’t necessarily the most popular, the most successful at treatment,” says Dave Aronberg, Palm Beach County chief prosecutor, who directed the grand jury probe. “It’s often the company that pays Google the most.”

Google says it has always been its policy to block sites that traffic in illegal or unethical activities from advertising or showing up in search results. On Sept. 14 the company went further: It announced plans to stop accepting ads for rehab centers. The sudden announcement came a few days after the tech news site the Verge published a story about how unethical treatment providers, and in some cases criminals, use AdWords to exploit addicts. It described treatment operators who deceive vulnerable patients about treatments, facilities, and even the locations of their clinics. Some advertisers posed as caregivers but were really call centers that sold leads on patients to the highest bidder.

Federal and state laws make patient brokering, or selling access to patients, illegal, under the theory that money shouldn’t take precedence over finding the proper care. But the largely unregulated business of addiction treatment in America is driven by effectively paying to acquire patients, in the form of digital marketing or so-called patient lead acquisition. Google is at the center of it all because most people have no idea how to find help for opioid addiction. So they search, say, “addiction treatment near me,” and Google takes over.

There’s big money involved. A midsize addiction treatment center can easily shell out $1 million a month or more for Google AdWords. Fees per click for the most popular addiction keywords have doubled over each of the past three years. To run ads for the term “drug rehab locations,” AdWords suggested in mid-September that marketers place a minimum bid of $187 per click, according to an analysis of Google data from marketing firm Apttus Corp. The suggested starting bid for “drug addiction treatment program” was $106.71; for “drug rehab detox,” it was $93.24.

Google’s announcement about its new policy suggested that the company had recently become aware of the problem of AdWords abuse. “After conducting a thorough review and consulting with experts, we found a number of misleading experiences that led to our decision to restrict ads entirely in this category until we can find a better way to connect those that need help to reputable treatment centers,” a Google spokesperson said. For insight into the timing, Google directed Bloomberg to Facing Addiction, an advocacy group based in Danbury, Conn. Greg Williams, co-founder of the group, says that around the time of the Austin conference, he went to Google with concerns about advertisers. According to Williams, the group’s work documenting abuses was a factor in the policy change. “When somebody without a dog in the fight came to them with a powerful argument, they heard us out,” Williams says.

But it’s hard to believe the company hadn’t known for some time that its advertiser base was riddled with crooks. All you needed to do was Google it. Aronberg has been accusing AdWords addiction treatment advertisers of crimes for several years, and his grand jury report (PDF) was published nine months before Google took action. Legitimate treatment center customers have been filing complaints about shady operators with Google long before the announcement.

Google has been actively pursuing profits from the business, despite complaints that it’s a magnet for criminals. There’s an entire sales division in Cambridge, Mass., Google Health Systems, that focuses on medical markets, including addiction treatment. It’s sent account executives to peddle AdWords and other services at addiction treatment conferences and webinars. Google may be raking in $1 billion or more a year from addiction treatment advertisers, according to Williams, who based the estimate on average marketing spending. (Google declined to comment on anything related to its revenue sources.) “I thought it just happened organically, that because it’s Google, it would naturally get a lot of companies that would pay to market,” says Aronberg. “I did not realize Google is actively courting the industry, suggesting the right keywords and going to conferences. That’s crazy.”

Anti-Google sentiment was palpable at the Austin conference, especially after Weum told the crowd that it was hard for Google to cut off shady treatment providers unless someone tipped off the company.

As the discussion wound down, Jeffrey Lynne, a lawyer in Boca Raton, Fla., had heard enough. Lynne, who specializes in advising addiction treatment centers, stood up and accused Google of not only enabling a dirty business but actively profiting from it. “Google has a fundamental responsibility to stop making money hand over fist by jacking up these ad prices because of an algorithm,” Lynne said, drawing applause from the crowd. “We need you to step up to the plate,” he said. “Because people are using you to human-traffic our children.”

Weum, who hawked AdWords products for two years at a myriad of industry conferences, including several on addiction treatment, says he was shocked by the sense of outrage from people in the Austin hotel ballroom. “It really felt like I was being blamed for it,” he says. “I felt the full brunt of the anger with patient brokering.” One man sitting next to Weum on the same panel, Dan Gemp, wasn’t surprised. Gemp is chief executive officer of Dreamscape Marketing LLC, a Columbia, Md., company that specializes in running ad campaigns for addiction treatment providers. He’d filed multiple complaints with Google about treatment center operators who did such things as hack his clients’ websites to hijack potential patients. He says he’s seen unethical competitors change clients’ phone numbers on Google My Business directories to siphon off potential patients and usurp clients’ names by bidding for them as AdWords keywords. Gemp’s own presentation at the conference was largely about how to defend against these shady practices. Weum says that before the conference was done, he was thinking about ending his stint as a Google contractor. By the time things wrapped up in Austin, Gemp had offered Weum a marketing job, and in August he took it.

So far, there are still holes in Google’s ad ban. On Sept. 25, 11 days after the policy change was announced, searches for “addict treatment,” “rehab Boston,” and “rehab Vermont” produced four paid ads for treatment facilities at the top of the results. Elisa Greene, a Google spokeswoman, said implementation of the changes would come gradually but declined to offer a detailed timeline.

Gemp says his Google reps have told him the company is zeroing in on 70,000 addiction-treatment-related keywords. It will be both complicated and expensive—if Google successfully cuts off shady operators, it’s going to cost the company money. But then, no one ever said it was easy getting clean.

Few products in tech have drawn as much ridicule or outright laughter as Google Glass. But that wasn’t always the case. Back in 2012, Sergey Brin showed off a prototype of Glass at Google’s I/O conference:

A screen behind Brin projected a live stream chat between Brin and two Google engineers in a plane. Suddenly, one of them jumps out of the plane, parachuting onto the roof of the stadium where the audience is sitting. The entire event is broadcast live through the Google Glass he’s wearing.

Glass elicited an awe-inspiring response at the conference and in the press—at least initially. People were excited about it because, like the recently announced Apple Watch Series 3, it promised them a new, post-mobile way of communicating.

The tide began to turn after the Google Glass pre-release in 2013. Beyond the planned stunt, there was little that hinted at a real use case, let alone ecosystem, behind the new product. And the bad PR mounted.

Headlines like “Google Glass getting to grips with ‘geek aesthetics,’” “Google Glass will make you manly, says Sergey Brin,” and “Google Glass is always listening, assuming you have a hack” emerged to disdain. Robert Scoble famously wore them in the shower. By 2015, no one wanted to be seen wearing a pair.

But, Google Glass is about to relaunch this year—and that begs a few questions:

Given its potential and technology, why wasn’t Glass the spectacular success many expected it to be the first time around?

Why did it fail so dramatically?

What made Google decide to relaunch the product, and what are they doing differently this time around?

Let’s dive deeper into the hype, death, and rebirth of Google Glass.

2009-2011: The Development of Google Glass

Glass started with a vision of an exciting new technology that would change the world.

Google had high hopes for Glass. The company wanted smart glasses to be the next big hardware platform—one as groundbreaking (and profitable) as Apple’s iPhone. The iPhone put a computer in your pocket and made it accessible through a tap and a swipe. With Glass, Google wanted to help you interface even more seamlessly with technology by putting a computer on your face.

“We already see a future in which the humble contact lens becomes a real platform, like the iPhone is today, with lots of developers contributing their ideas and inventions. As far as we’re concerned, the possibilities extend as far as the eye can see, and beyond.”

Parviz had been working on creating smart contact lenses, and it was this vision that he brought to the Glass project a year later. The idealistic vision around Glass’ development masked a huge blindspot: how people would actually use the product.

The team behind Glass succeeded in solving the really hard problem of creating a computer you could wear on your face. What they failed to figure out is why people would want one.

2009-2010: Google CEO Eric Schmidt approached Sebastian Thrun, a Stanford professor, to help create a lab for long-shot technology programs. Google Glass was now the first project of the infamous “moonshot factory,” followed by self-driving cars. Thrun began to put together a team of researchers, scientists, and engineers to work on early prototypes of Glass.

The early prototype of Glass looked like a scuba mask attached to a laptop you carried around in a backpack. It weighed eight pounds.

2011: The Glass team began to iterate on their early designs to make a product that was light and portable. They removed the laptop in the backpack, and began engineering custom optical displays and circuitry.

The people behind Glass were veteran researchers and engineers with a lot of expertise in wearable computing. One Glass co-creator, Astro Teller, had previously worked on an armband that tracked exercise and sleep. Parviz was the other co-creator, who worked on integrating digital displays and monitors into contact lenses. On a technical level, the team was packed with rockstars.

They got to work on Glass in complete secrecy from the rest of Google. Early on, the team’s focus was figuring out how people would interface with the product. They broke down the basic user experience of Glass through a series of prototypes, using a pico projector connected to a laptop to project a display onto a sheet. Once they sorted out the kinks of the interface, they focused on refining the hardware to be light and portable.

What they hadn’t quite figured out was who their target audience was. The engineers couldn’t agree on how to position Glass. One group believed it should be a consumer product that people would wear all day. Another group believed Glass should fulfill “specific utilitarian functions.”

Google co-founder Sergey Brin figured that these debates would be ironed out by launching Glass early and iterating based on feedback. This approach had served Google well in the past with software products like Gmail and Docs, so they assumed it would work again. Brin was eager to get Glass out into the wild.

By 2012, a team of designers and engineers at Google’s moonshot factory were ready to show the world a prototype, even if they didn’t yet know what the world would use it for.

2012-2014: The Initial Launch (and Failure) of Google Glass

That brings us to the moment Sergey first demoed Glass in 2012. A couple months earlier, Google had previewed Glass to the public for the first time through a futuristic concept video:

The video walked you through a scenario wearing Glass: Imagine waking up from a nap. You flip through your calendar while pouring a cup of coffee, check the weather, and text a friend—all without looking at a computer or smartphone screen. That was the early promise behind Glass in promotional videos and at the I/O conference.

“The old Google rejoiced in sending people away from the site as fast as possible, because the result mattered, not the search. Glass points to a risk of forgetting that.”

Google Search provided clear utility for customers. It helped them find exactly what they were looking for on the web by sending them away from Google. In contrast, the consumer version of Glass was asking people to come in the front door and stay. It wanted to replace the smartphone and become your interface for everything—from sending texts to reading the news. The problem was that it didn’t seem to do anything better than a smartphone.

2012: Glass is officially announced in April 2012, with a blog post on Google Plus and a concept video. Later that year in June, Sergey Brin shows a live demo of Glass at Google’s I/O keynote conference. In September, Glass is featured on models at New York Fashion Week. The resulting media blitz whipped up huge excitement around the product.

Here was the Google Glass announcement on Google Plus:

Google co-founder Sergey Brin and fashion designer Diane von Furstenberg wearing Glass on the fashion runway. 2013: Google creates the “Glass Explorers” program, where people can apply to test an early version of Glass. The early-access campaign was fueled through Twitter. Here’s what the application for the Glass Explorer’s program looked like:

While Glass was still a prototype, the hype behind it meant that everyone saw it as a finished product. They weren’t impressed. Pretty soon, public perception around Glass radically shifted.

2014: Public backlash against Glass ramps up. The product is parodied everywhere from The Simpsons to The Daily Show. Here’s an example of a Comedy Central skit:

Glass’ public launch, originally intended for 2014, was delayed indefinitely.

The “Glass Explorers” program was meant to help Google iterate on the product based on real user feedback. While this strategy had proven itself for products like Gmail, Sheets, and Docs, it didn’t translate to hardware—in large part due to the media circus around Glass.

By mid-2013, as Glass was making its way into the real world, things started to change. The public was not only less interested in Glass, but also legitimately concerned about the implications of the technology. Here were some of the big challenges for Glass:

At a whopping $1,500, few consumers were actually willing to pay for Glass. Due to the restricted nature of the pre-launch, most couldn’t buy one even if they wanted to. For its early life, Glass was only accessible to wealthy tech professionals and other early adopters.

The marketing blitz around Glass, from the I/O keynote to featuring Glass in fashion shows, created massive expectations around a product that was still a prototype. Upon launch, many of these features shown off in Google demo videos—video conferencing, voice response to text messages, and more, were still in development and unavailable. To use Glass, it had to be tethered via bluetooth to an Android phone while the product itself frequently crashed and ran out of power. One of the only features that worked well was the camera and video recording feature.

The camera and video features of Glass were seen as an invasion of privacy, causing a major PR crisis for Google. When someone looked at you wearing Glass, it felt like they were pointing an iPhone at your face.

Perhaps the biggest issue was that Google failed to present a convincing use case for Glass that proved, for most people, that their smartphones couldn’t do better. Glass lacked a “killer app” like Instagram or Angry Birds that hinted at its platform potential for consumers.

In contrast to how the public and media were originally talking about Google Glass, now the headlines sounded more like this: “ Google Glass is the Worst Product of All Time” and “The Verdict is In: Nobody likes Google Glass.” In one incident, a woman wearing her Glass to the bar had it forcibly removed by another patron. Everyone else at the bar cheered. While Glass started out strong, the product was ultimately seen as a symbol of tech privilege and invasiveness. Glass users were dubbed “Glassholes” and publicly shamed.

In the short span of a year, Glass had gone from a product that was supposed to make the smartphone invisible to one that was a source of public ridicule. By November 2014, nine out of 16 Glass app makers stopped working on projects for Google Glass because there wasn’t adequate market demand—or even interest. Glass co-creator Babak Parviz left Google for Amazon, followed by other important team members. Publications started to report—prematurely—the death of Glass.

While the team behind Glass still believed in the product’s potential, it was obvious that Glass wasn’t going to be the big consumer hit that they had hoped for. They started exploring other use cases for the product.

“When we originally built Glass, the work we did on the technology front was very strong, and starting the Explorer program was the right thing to do to learn about how people used the product….Where we got a little off track was trying to jump all the way to the consumer applications….We got more than a little off track.”

By January 2015, Google had withdrawn the consumer version of Glass. Google learned its lesson from launching too early, with too much hype. Just as they were winding down the consumer version of Glass, they launched a new enterprise initiative for the product.

To the public, Glass was a failed product that no one wanted. To Google, Glass was entering a new chapter.

2015-2017: The Relaunch

Back in 2014, just as Glass seemed doomed, a ray of hope appeared for the project. The team noticed that small startups had been purchasing pairs of Glass via the Explorers program, and building custom software on top of it for the enterprise. They were using Glass to do work in various industries—from manufacturing to healthcare.

The corporate interest in Glass was so promising that Google created a specific Glass for Enterprise team to help develop the new ecosystem.

This decision culminated in the relaunch of Glass this July—this time, positioned clearly as an enterprise tool.Where Glass’ consumer launch had splashed across magazine covers and the fashion runway, the new Glass landing page shows a factory worker wearing Glass while working with power tools. The product description includes clear use cases for Glass, from watching training videos and accessing instruction manuals to activating applications while working. Cementing the product’s new business positioning are testimonials from partners: “25% reduction on low volume complex assemblies.”

These specific details and concrete applications for Glass present a stark contrast to its consumer launch. Google had clearly learned its lesson.

Let’s dig into the events that led Google to this point:

2015: Google closes the Explorers program, announcing that Glass is “graduating” from Google X to its own team within the company. Glass is placed under the leadership of former iPod creator Tony Fadell. The Glass team focuses on refreshing the product for enterprise applications, working closely with 10 partner companies who work on the software side.

2016: Google’s new enterprise edition modularizes the frame of Glass, making it easy to detach the electronics and display, and clip them onto a pair of safety glasses. They improved hardware features like battery life, processing speed, and WiFi connectivity. Augmedix, a startup developing Glass applications for the healthcare industry, raises $17M.

2017: Google publicly announces the launch of Glass for Enterprise.

Back in 2014, as the consumer version of Glass was being thrashed, Google started partnering with companies like Boeing and GE to figure out what specific pain points Glass might help them solve.

“We talked to all of our Explorers and we realized that the enterprise space had a lot of legs,” says Jay Kothari, who is now project lead on the Glass enterprise team. Interest from corporations suggested that a dedicated team might work on a specialized version of Glass to serve them.

Placing Glass under the supervision of Tony Fadell and moving the product from the “moonshot factory” signaled Google’s belief in the product’s viability. Faddell commented at the time, “I remember what it was like when we did the iPod and the iPhone. I think this can be that important, but it’s going to take time to get it right.” The company went on a hiring spree, recruiting former developers and hardware engineers from Amazon to build the team out.

Keeping the project under wraps, the team worked with partners and enterprise companies to develop practical applications for Glass.

At AGCO, a manufacturer of agricultural equipment, factory workers use Google Glass to view instructions and checklists as they assemble complex machinery. AGCO estimates that Glass has helped reduce production time by 25%. At DHL, workers use Glass to scan items on racks and see what bins to place them in to fulfill orders—with an estimated 15% increase to efficiency. Meanwhile, at Dignity Health, doctors use Glass during patient examinations. Instead of logging information on a computer during the exam, information is recorded from a doctor’s Glass, transcribed, and processed.

Everything that made Glass feel invasive for consumers was no longer relevant in an enterprise setting. On the factory floor or in a doctor’s office, Glass was no longer a high-end gadget for taking pictures of family and friends. It was a tool engineered for getting work done. Workers use Glass to scan parts, access training videos, and record defects.

The kicker is that by working closely with partner companies and corporations, Google is finally putting together a healthy ecosystem with platform potential for Glass. The partner companies develop end-to-end solutions for Glass in specific verticals like healthcare, logistics, and manufacturing. They distribute those solutions directly to enterprise companies, driving higher usage of Glass. That gives Google specific customer feedback it can use to improve product.

Glass for Enterprise looks like it has the platform potential that Google originally intended for Glass, but in an enterprise setting. Over the past seven years, Glass has had a bumpy ride. Today, it finally seems to be finding its way.

Where Glass Can Go from Here

With the relaunched enterprise edition, Glass is finally starting to realize the high hopes around the product. Instead of trying to make Glass something that people wear all day, Google has taken the opposite approach. The enterprise edition of Glass has been designed and marketed to solve concrete, practical problems. In doing so, Google is overcoming the disaster of Glass’ early launch and opening new doors for the product.

With its renewed focus, Glass has a lot of room to expand.

Increased modularization: While the consumer version of Glass was meant to be used by most people in the same way, the enterprise edition was designed for more flexibility. The enterprise edition modularized the frame, electronic display, and camera glass, allowing a worker to detach Glass from the frame and stick it on a pair of safety glasses. In the future, Google could double down on this approach. They could allow third parties to create specialized modules for Glass, like an infrared camera for doctors, or external memory chips. This increased flexibility would make Glass adoption easier across a broader set of industries.

Back to consumer: Snapchat’s Spectacles have shown that the consumer market is receptive to wearable smart glasses—as long as they are packaged in the right way. By simplifying the enterprise edition into an initial consumer version, Google would be able to offer consumers a lower and more palatable price point. The enterprise edition takes a step toward addressing privacy concerns by shining a light when Glass’ camera is activated. Most importantly, they need to nail their value proposition and show people what Glass can do that their smartphones can’t.

Platform potential: The consumer version of Glass alienated developers, who couldn’t charge for their applications or make money through ads. With the enterprise edition, developers are building new applications for Glass and making money by selling the hardware and software to corporations, creating a profitable ecosystem. Meanwhile, the Glass team is partnering with Google Cloud to take the product further. That certainly seems to be a step in the right direction. As a product, Glass is positioned to benefit from Google’s deep expertise in cloud computing and machine learning.

While Glass has been around for seven years, in many ways the product’s relaunch this year signals a new beginning. There are a ton of ways that Google could expand and grow the product. That’s actually the difficulty of creating a product like Glass in the first place. More than anything, Google’s ability to execute methodically will determine the success or failure of the product.

3 Key Lessons Learned From Google GlassBuilding any product is a constant process of experimentation, failure, and learning. That’s even more true for a product as ambitious as Google Glass.

While Glass appears to have successfully reinvented itself, there are a lot of points in its timeline where choosing a different path could have saved the team headaches and time. If you’re building a product today, these are the key lessons to take away from the story of Google Glass:

1. What’s the goal of your product?This is a crucial question to answer when you’re trying to build a brand new platform, or an application on a new technology platform. Where did the idea come from? How have you validated the idea? How do you know whether building it is a risk worth taking?

Create a problem-hypothesis that describes your target customer and the problem that you think they have. This should take the form of: [Group of people] have a problem [their problem].

Set up a system that pulls users who fall into your target audience toward your idea for solving the problem. For a new product or idea, you can create a mock landing page that explains your idea and includes a sign up form where interested visitors can give you their email addresses.

The last step is to survey people who sign up to learn more and further validate your idea. Ask them what existing products they’re using, how often they use them, and what their key pain points are around the products they use.

2. Run user research and tests before, during, and immediately after initial product development.It’s particularly important for revolutionary new products to launch gradually, starting in one or two small test markets first. If you’re working on a new and groundbreaking technology, chances are that you’re already a believer. That’s why it’s so important to get outside of your own head and into how end-users will think, feel, and react to the product. It’s not enough to have a vision. That vision has to be something that your customers can relate to.

Here are a couple of resources that will help you run better user research:

3. Nail the value propositionMake it very clear why the product you’re launching is something your customers should be interested in. How does this product differ from competitors’ products? If there are no major competitors, talk about how the product solves a problem (for whom, when, and how). What are the most powerful use cases for the product? Why should anyone care?

One exercise that will help you achieve this is writing a press release or blog post before you get started shipping code. It’s a technique developed by Amazon, where every product initiative begins with a press release. That helps Amazon “work backwards” around customer needs.

Former Amazon PM Ian McAllister put together this outline that you can use to get started.

Heading: Name the product in a way the reader (i.e. your target customers) will understand.Sub-Heading:Describe who the market for the product is and what benefit they get. Keep it to one sentence only underneath the title.Summary: Give a summary of the product and the benefit. Assume the reader will not read anything else, so make this paragraph good.Problem: Describe the problem your product solves.Solution: Describe how your product elegantly solves the problem.Quote from You: A quote from a spokesperson in your company.How to Get Started: Describe how easy it is to get started.Customer Quote: Provide a quote from a hypothetical customer that describes how they experienced the benefit.Closing and Call to Action: Wrap it up and give pointers on where the reader should go next.

Back in 2014, Astro Teller wrote a piece for CNN that explained the inspiration behind Glass:

“When a technology reaches this point of invisibility, it has reached its ultimate goal: becoming part of our routine, with no compromise between us and the technology….What inspired Google Glass was partly the realization that consumer technology products often don’t live up to those standards.”

I love this. Technology shouldn’t call attention itself. It’s a means to an end. That end is to give people a better way of doing things that they’re already doing. All of Glass’ early problems can be traced back to forgetting this core principle. With the best engineers in the world and nearly unlimited resources, Google grew overconfident and distracted from what they should have been doing all along—helping people solve problems.

By launching too early and with too much hype, Glass didn’t allow itself to become invisible. Instead the product itself became the focus of everyone’s attention. It’s a lesson that Google has since learned from and is applying to the enterprise edition of Glass.

If you only remember one thing after reading this article, remember that the best products don’t come from the technology behind them. They’re about how well they become a part of our lives.

Google Finance Portfolios to be eliminated...other changes in the hopper..

By Max A. Cherney

Portfolio feature will be eliminated, automated version will migrate to Google Search in first major update since 2009

Alphabet Inc. has informed users of its Google Finance product last week (https://productforums.google.com/forum/#!category-topic/websearch/uf8q-AaPiyQ) that the core of the offering, the portfolio feature, will soon disappear as the stocks-focused product undergoes a transformation that bundles it into Google's dominant search offering.

The November move will mark the first major change to a languishing product that has existed since 2006 but hasn't seen an overhaul in more than eight years. To replace the outgoing features, Google said that it plans to migrate users' portfolios to Google's search product, which will aim to analyze users' interests and provide a report for users.

"As part of this updated experience, you'll still be able to follow the stocks you're interested in and receive the latest industry news and market trends, but the Portfolios feature will no longer be available as part of the service," a Google spokeswoman wrote in an emailed statement.

Google Finance portfolios, similar to rival finance-focused products like Yahoo Finance, allow users to track a number of investments over time, including profit or loss calculations based on the purchase price of a security, and to create data visualizations based on the information. Before the mid-November changes, Google has given its users an option to download their portfolio in CSV or OFX format.

It isn't clear what, if any additional features Google plans to change, or what the Google Finance site will look like after the overhaul is complete. A spokeswoman confirmed that the Google Finance site will remain--in some form--but declined to make executives available to discuss the changes in greater detail.

Alphabet (GOOGL) (GOOGL) stock is up 18.6% this year, while the S&P 500 index has gained 11.5% and the Dow Jones Industrial Average has gained 13%.

Alphabet expected to show off new Pixel smartphones and other gadgets Wednesday

Alphabet Inc. will look to impress gadget lovers Wednesday with a new line of devices for the holiday shopping season, but the company's event will also be important to determine if the money Google is spending to produce its own hardware and challenge Apple Inc. is worth the cost.

Much of what Google will unveil at the San Francisco event has been reported, thanks to a series of leaks last month. Two new Pixel phones (https://www.droid-life.com/wp-content/cache/page_enhanced/www.droid-life.com/2017/09/19/google-pixel-2-xl-exclusive/_index.html) -- one larger than the other -- a new high-end Chromebook (https://www.droid-life.com/wp-content/cache/page_enhanced/www.droid-life.com/2017/09/19/google-pixelbook-chromebook-price-release-date/_index.html), a mini version of Google's Home smart speaker (https://www.droid-life.com/wp-content/cache/page_enhanced/www.droid-life.com/2017/09/19/google-home-mini-exclusive/_index.html) and an updated Daydream virtual-reality setup (https://www.droid-life.com/wp-content/cache/page_enhanced/www.droid-life.com/2017/09/19/new-google-daydream-view-exclusive/_index.html) are expected.

While the surprise element may be missing from the event, there is still much anticipation to see what Alphabet (GOOGL) (GOOGL) can do in challenging Apple (AAPL) directly with its own high-end hardware. More than anything, Wednesday's event will need to convince investors and the media that the company's hardware strategy is a bet worth making.

"I think they need to convince everyone that their hardware strategy is justified, this is a very expensive endeavor," said Creative Strategies Principal Ben Bajarin. "If this is a strategy they need to remain committed to, they need to take meaningful share. These new products need to be able to compete with some of the other strong product lineups, and it's not as easy as it once was."

Google appears to be doubling down on the bet it made last year in introducing the Pixel to challenge Apple's iPhone, after previously leaving most hardware design and manufacturing to partners like Samsung Electronics Co. Ltd. (005930.SE) . Last month, Alphabet committed $1.1 billion in a deal with HTC Corp (http://www.marketwatch.com/story/google-htc-sign-11-billion-cooperation-agreement-2017-09-20).(2498.TW) that will bring hardware talent and licensing from the hardware partner that has been essential to the Pixel line.

See also: Why Google's HTC deal may be different than the Motorola bomb (http://www.marketwatch.com/story/why-googles-htc-deal-may-be-different-than-the-motorola-bomb-2017-09-21)

Alphabet is making that commitment while the opportunity to profit from sales of its own branded smartphones, Chromebooks and smart speakers is not guaranteed. Alphabet's hardware sales are bundled with all non-advertising Google revenue in a bucket of sales that grew 62% to $3.4 billion in last year's holiday shopping quarter, but that amount is dwarfed by the rest of Google's business and profitability is a real question mark.

Analyst Jan Dawson of Jackdaw Research believes Google has sold about 2 million Pixel phones -- Apple sold that many iPhones in half a week, on average, last year -- and still has a lot to learn about the business. One of the reasons the last Pixel models did not see Apple-like numbers of units was that Google initially gave Verizon an exclusive deal to sell the phones, Dawson says.

"The devil is in the details," said Dawson over the phone. "The reality is they sold 2 million phones because of limited supply, limited distribution and that they were not differentiated in the market. Unless those things change, it's not going to be that material to Google's sales. Even if they move twice as many units, that's still a tiny fraction of the global smartphone market."

Don't miss: Google Finance as you know it is going away -- here is what will remain (http://www.marketwatch.com/story/google-finance-as-you-know-it-is-going-away-here-is-what-will-remain-2017-09-27)

Google could juice its revenue from the Pixel with a new pricing strategy for its phone lineup, much like Apple's iPhone X announcement earlier this month (http://www.marketwatch.com/story/new-apple-iphones-key-feature-is-its-price-tag-2017-09-09). Dawson says that it would not surprise him to see a price increase in the new Pixel phones driven by more expensive components and rising memory costs.

"It's quite possible that Pixel devices will be more expensive than last year," Dawson said.

Google could go the other way, however, and look to offer the Pixel at a much lower price than the iPhone X to disrupt sales of Apple's latest and greatest smartphone, which will begin preorders later this month. While it could weigh on Alphabet's profitability, a larger quantity of cheaper sales could have a better chance of making a difference for a company expected to surpass $100 billion in annual revenue for the first time this year, and would fit the Android vs. Apple rivalry as it has been known so far.

To compete, the display and camera are the two features "Google needs to be competitive with" Apple and Samsung, Bajarin said. Specifically, the camera needs to be "top-notch," perhaps with some kind of three-dimensional sensing, and the display needs to be bezel-less, he says.

While the phones might be the gadgets that consumers and investors watch closest, Bajarin also said that Google's expected Home Mini smart speaker might be most exciting. The new Home, and its big brother, can showcase the products Google is best at: search and giving users the data they want.

"Nobody saw the volume of speakers coming, Amazon (AMZN) has sold 25 million to 30 million to date, which is a lot given how new a category it is," he said. "It's a category with a lot of opportunity and a great play if the margins are there. But again, they've got to prove themselves that they can take smart-speaker share."